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Business failures rocket in Yorkshire as experts warn of difficult year ahead
BUSINESS failures in Yorkshire and the Humber rocketed by 24.1 per cent in the first nine months of the year - with a total of 1,630 failures.
However, comparing the third quarter (Q3) of 2008 with the same period last year, insolvencies increased by 33.9 per cent with 593 failures.
The shocking figures are contained in a new report by Experian, the global information services company.
Its analysis shows that nationally there were 16,591 UK business failures in the first nine months of 2008, representing a 22 per cent increase compared to the same period in 2007.
Its latest Insolvency Report and Distress Index also shows that between July 1 and September 30, 2008, 5,957 UK businesses failed.
This represents a 28.2 per cent increase compared to Q3 2007, which saw 4,648 failures.
Experian's findings come as a survey conducted by R3, the insolvency trade body, suggests recession is only just hitting the UK economy and it will not start to recover for 18 months.
Insolvency practitioners across the UK predict that personal and corporate insolvencies will continue to rise dramatically over the next year and a half and will approach levels last seen in the recession of 1992.
Andy Wood, partner in The P&A Partnership and Yorkshire regional chair of R3, said: "For the last three or four years a number of businesses that were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up.
"Many smaller business owners have been borrowing to their limit, including using their personal credit cards to fund the business."
Even though current levels of personal insolvency are already at record highs, insolvency experts predict these will continue to soar.
Experian's research found that outside of London (969 failures) and the South East (1,163 failures), business failures in volume terms were running at their highest in the traditional manufacturing regions of Yorkshire and the Humber, the North West and the West Midlands.
Of the 34 sectors monitored, 25 saw increases in insolvencies over the year to date compared to the same period in 2007.
Key sectors affected included business services with 1,284 insolvencies in Q3 2008 (up 22.3 per cent) taking the annual total for the sector to more than 3,550 failures (up 17.8 per cent).
Building and Construction saw 537 failures over the quarter (up 22.9 per cent) with a year to date total of 1,564 failures (up 19.2 per cent).
The property sector, with 434 failures during the quarter (up 221 per cent) saw its annual figure reach 891 failures (up 130.2 per cent).
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